Exterior view of a Bon-Ton store

With a bankruptcy court auction still set for Monday, the fate of  The Bon-Ton Stores is even more uncertain than it was a few days ago when a group of landlords said they were willing to buy “substantially” all of the assets to keep the retailer afloat.

In a court document filed Monday, the retailer sought court approval to pay the consortium of investors — Namdar Realty Group, Washington Prime Group and DW Partners LP — a $500,000 “work fee” so the parties can keep discussions ongoing as they try to finalize an agreement to acquire Bon-Ton and keep it operating as a going-concern. Bidders typically ask the court for a fee so they can cover the costs of their due diligence. On Wednesday, a bankruptcy court denied the request, throwing a wrench in the retailer’s plans. It remains to be seen whether the investor group will still make a bid at auction. Even if a bid had been firmly in place, there was always the chance that the offer could fall short should a better one be placed during the auction. But without a bid acting as the so-called “stalking horse,” the odds are growing that a liquidation of the company could be the end result.

The investor group is believed to be the only option for the bankrupt retailer to emerge as a going concern. Others are said to be interested in just certain assets such as a group of store locations, or in a liquidation of the company.

Bon-Ton filed its voluntary Chapter 11 petition in February in a Delaware bankruptcy court. At the time, the retailer said a group of hedge funds that own some of the debt had been pushing for a liquidation of the company. The group of debt holders is believed to be working with liquidation firms to submit bids that would shutter the business.

The retailer has more than 22,700 employees and about 250 stores in operation across 23 states. It operates under the nameplates Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers.


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